SETTING THE RECORD STRAIGHT (publ. 6/09/07)In a story in Thursday’s business section, the pay of Terry Semel, the CEO of Yahoo, was incorrect. He earned $71.6 million in 2006.

At least two independent proxy advisory firms are urging Yahoo shareholders to protest Chief Executive Terry Semel’s $71 million pay package with a symbolic vote against the re-election of three members of the board of directors who are responsible for executive pay.

Yahoo’s annual shareholders meeting will be held Tuesday.

Last week, Institutional Shareholder Services noted that Semel is one of the highest-paid CEOs in America, despite a slowdown in Yahoo’s revenue growth in 2006 and a 60 percent decline in net income compared with 2005. Yahoo’s stock also fell 35 percent in 2006.

“It appears that CEO Semel is rewarded when times are good … and when times are bad,” ISS said. Separately, Proxy Governance said Semel’s pay is more than 900 percent above the median paid to CEOs at peer companies like eBay or Electronic Arts.

In a written response, Helena Maus, a Yahoo spokeswoman said: “Under Terry’s leadership, the company has a clear strategy to create stockholder value, and the company is well-positioned to capitalize on the substantial growth opportunities ahead for the Internet.”

“He’s tremendously overpaid,” said compensation expert Graef Crystal. “If this was an IQ series (ranking), his first name would be Albert (Einstein). He’s off the map.”

Shareholders at the 2005 meeting protested Semel’s $231 million compensation by withholding about 20 percent of votes for the three members of the compensation committee. The effect was purely symbolic, since the board would ultimately decide about removing a member.

However, the dissatisfaction appeared to register. The following year, Semel’s pay was reduced from $600,000 to $1, although a grant of 6 million options more than made up for the loss. The committee also approved an additional 800,000 options as a bonus.

Yahoo’s compensation committee is made up of Roy Bostock, former chief executive of D’Arcy Masius Benton & Bowles and its successor company, the MacManus Group, an advertising and marketing services firm; Ron Burkle, a managing partner of the Yucaipa Cos., a private investment firm; and Arthur Kern, a co-founder and former chief executive of American Media, a group owner of commercial radio stations sold to AMFM (now part of Clear Channel Communications).

Maus said the larger grant was part of a three-year performance and retention arrangement, and that during that period Semel would only be eligible for an additional bonus of 1 million options.

“It is also worth noting that Terry does not receive any perks, pensions or other retirement benefits, severance benefits, or any other deferred compensation,” Maus added.

"I fully support the principles behind Senate Bill 1: to defeat efforts by the president and Congress to undermine vital federal protections that protect clean air, clean water and endangered species," Newsom said in a written statement.